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Property developers venture into nursing home projects
Retirement nirvana: The exterior of Senior Living DâKhayangan, Jababekaâs newly constructed nursing home
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span class="inline inline-center">Retirement nirvana: The exterior of Senior Living D'Khayangan, Jababeka's newly constructed nursing home. The growing elderly population in Greater Jakarta has prompted the company to develop the project.
Indonesia's increasing elderly population, coupled with families' inability to take care of their elderly relatives, has prompted developers to venture into nursing home projects. However, it will take some time before the projects gain popularity.
Along with Indonesia's steady economic growth, many property developers are expanding their portfolios into different projects such as hotels, apartment blocks, landed houses and office buildings.
Those types of projects seem to successfully attract the market. How about a nursing home project?
Jababeka is one of very few property developers that sees nursing homes as a relatively untapped product with a favorable future outlook.
Cushman & Wakefield Indonesia's research and advisory head, Arief Rahardjo, said that nursing homes could see greater demand in the near future, especially in Greater Jakarta, due to the change in Indonesia's demographic trends.
'Indonesia's elderly population will continue to expand and some 10 percent of them live in Greater Jakarta. Meanwhile, many families struggle with time management and taking care of their elderly family members. Much of this situation is due to the fact that many husbands and wives have to be the breadwinners of their families,' Arief told The Jakarta Post recently.
According to the Jakarta Statistics Agency, the number of residents aged 65 or older in the city was 343,020 people in 2013, a 16 percent increase from 293,812 in 2010. By 2025, it is predicted that 32 million to 36 million people, or around 11.34 percent of Indonesia's population, will be considered elderly.
Publicly listed developer PT Jababeka Tbk sees this as a potential opportunity, as the company is developing an upscale nursing home for the elderly called Senior Living D'Khayangan.
Jababeka president director SD Darmono believes that nursing home development offers good business prospects in Indonesia.
'We deliver high-standard facilities and services that can help the elderly live healthier and more comfortable lives,' he was quoted by kontan.co.id as saying.
Just as the word khayangan, literally meaning heaven, suggests, the development features facilities that complement a good life in retirement.
Among the facilities provided at Senior Living D'Khayangan are a restaurant, rooms for health consultation, therapy and activities, a spa, and karaoke. In addition, the nursing home plans to include classrooms where its residents can learn skills like growing fruits and flowers as well as making handicrafts.
' Nursing homes could see greater demand in the near future, especially in Greater Jakarta, due to the change in Indonesia's demographic trends.'
This nursing home in Cikarang, Bekasi, West Java is being developed by Jababeka Longlife City, a joint venture of Jababeka and Long Life Holding Co Ltd.
Jababeka owns 66 percent of the joint venture's share, and Longlife owns the remainder. Senior Living D'Khayangan was soft-launched on Oct. 3, 2012, and construction of the Rp 850 billion (US$70.9 million) project commenced on Feb. 6, 2013.
The development of the nursing home is set to occur in two phases. The first phase, which stands on 3.5 hectares of land, boasts apartment units and a villa. The apartment units and the villa cater to 40 people. The first phase of the project was officiated on Sept. 25.
The nursing home targets Indonesian and Japanese people aged 60 and up who have retired from companies in Cikarang. Elderly residents can enjoy their stay at the nursing home for the rest of their lives, with the requirement of an upfront one-time payment of Rp 1.8 billion per person for an apartment-unit stay and Rp 2.4 billion per person for a group of people seeking to live in a villa. An additional fee is required for health services and treatment.
According to Jababeka Longlife City media director Marlin Marpaung, as quoted by tribunnews.com, the amount of money that the residents pay accounts for membership fees, which means that they do not own the apartment units or the villas.
Thus, she continued, no money is returned or refunded to the residents' legal heirs when the residents pass away.
Marlin was quoted by kontan.co.id as saying that the company has set the target of housing a minimum of 40 people by the end of the year.
The developer has decided it will proceed with the second phase of the nursing home project after it gauges the market response to the first phase.
Indonesian Property Watch (IPW) executive director Ali Tranghanda shared Arief's views, saying that Indonesia's cultural values, which emphasize the importance of respect and devotion to one's parents, discouraged people from sending their parents to nursing homes.
'In Indonesia, if you send your parents to a nursing home, [people will see it] as if you've dumped your parents. This leads to small demand for nursing homes,' he told the Post on Wednesday.
Ali added that a nursing home project is deemed to be a high-risk venture.
'A few years ago, Agung Podomoro developed an apartment block for senior citizens at Podomoro City in Taman Anggrek, West Jakarta. Unfortunately, demand for the apartments was so low that they had to change the establishment into something else. Do you know the SOHO [small office home office] in Central Park? That building used to be an apartment block for senior citizens,' he said.
Arief, however, remains optimistic about the prospect of nursing home development in Indonesia.
'It will take some time to convince people to put their parents in nursing homes. Nevertheless, taking into consideration the demographic trend in which the elderly population is continuing to grow, we see market potential for nursing homes in the future,' he said.
Ali suggests that in order to attract more residents, developers need to create clustered housing estates for senior citizens instead of apartment units. He said that old people would feel safer living in a house because an apartment unit is more detached than rooms in a house. His statement is supported by his view that elderly people need to live surrounded by other people.
'A nursing home also needs to have round-the-clock medical facilities and staff members. Also, don't label the homes rumah jompo [houses for the elderly] because its meaning has become pejorative. It'd be better to call a nursing home a rumah pensiunan [home for the retired] or a senior citizens' residential compound,' he concluded. (Sebastian Partogi)
